After splurging on coronavirus, EU seeks state aid compromise with Britain

FILE PHOTO: European Union flags flutter outside the European Commission headquarters in Brussels, Belgium, June 5, 2020. REUTERS/Yves Herman/File Photo

WARSAW/BRUSSELS (Reuters) - The European Union could soften demands in trade talks that Britain follow its state aid rules, diplomats and officials have said, just as the bloc's own splurge to cushion the hit from the coronavirus has stretched its competition rules.

EU sources following Brexit described seeking a compromise as Brussels and Britain, which left the bloc in January, intensify talks on their relationship from 2021, when London's standstill transition agreement ends.